What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-04 compared with 2021-03-02 · 106 added, 98 removed, 1281 unchanged (14% of the section changed)

19 unchanged sentences

Southern First Bancshares, Inc.

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 149 )

To the Shareholders and Board of Directors of

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March 4, 2022

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 149 )

To the Shareholders and Board of Directors of

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The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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Common stock, par value $.

01 per share, 10,000,000 shares authorized, 7,772,748 and 7,672,678 shares issued and outstanding at December 31, 2020 and 2019, respectively

01 per share, 10,000,000 shares authorized, 7,925,819 and

7,772,748 shares issued and outstanding at December 31, 2021 and 2020, respectively

Nonvested restricted stock

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Net interest income

Provision for loan losses

Provision for (reversal of) loan losses

Net interest income after provision for loan losses

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Tax (expense) benefit

Reclassification of realized gain

Reclassification of realized (gain) loss

Other comprehensive income (loss)

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December 31, 2018

Proceeds from exercise of stock options

Issuance of restricted stock

Compensation expense related to restricted stock, net of tax

Compensation expense related to stock options, net of tax

Other comprehensive loss

December 31, 2018

Proceeds from exercise of stock options

Issuance of restricted stock

Compensation expense related to restricted stock, net of tax

Compensation expense related to stock options, net of tax

Proceeds from exercise of stock options  

Issuance of restricted stock, net of forfeitures

Compensation expense related to restricted stock, net of tax  

Compensation expense related to stock options, net of tax  

Other comprehensive income

December 31, 2019

Proceeds from exercise of stock options

Issuance of restricted stock, net of forfeitures

Compensation expense related to restricted stock, net of tax

Compensation expense related to stock options, net of tax

Compensation expense related to restricted stock, net of tax  

Compensation expense related to stock options, net of tax  

Other comprehensive income

December 31, 2020

Proceeds from exercise of stock options  

Issuance of restricted stock, net of forfeitures

Compensation expense related to restricted stock, net of tax  

Compensation expense related to stock options, net of tax  

Other comprehensive loss

December 31, 2021

See notes to consolidated financial statements that are an integral part of these consolidated statements.

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Adjustments to reconcile net income to cash provided by operating activities:

Provision for loan losses

Provision for (reversal of) loan losses

Depreciation and other amortization

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Write-down of real estate owned

Gain on sale of investment securities available for sale

Loss on sale of other real estate owned

(Gain) loss on sale of investment securities available for sale

Gain on sale of fixed assets

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Increase in cash surrender value of bank owned life insurance

Increase in deferred tax asset

Increase (decrease) in deferred tax asset

(Increase) decrease in other assets, net

Increase in other liabilities, net

Increase (decrease) in other liabilities, net

Net cash provided by operating activities

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Proceeds from sale of investment securities available for sale

Purchase of life insurance policies

Purchase of bank owned life insurance policies

Proceeds from sale of fixed assets

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judgments based on information available to them at the time of their examinations.

The Bank makes loans to individuals and businesses in the Upstate, Midlands, and Lowcountry regions of South Carolina as well as the Triangle and Triad regions of North Carolina and Atlanta, Georgia for various personal and commercial purposes.

The Bank makes loans to individuals and businesses in the Upstate, Midlands, and Lowcountry regions of South Carolina as well as the Triangle, Triad and Charlotte regions of North Carolina and Atlanta, Georgia for various personal and commercial purposes.

The Bank’s loan portfolio has a concentration of real estate loans.

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Other Investments

The Bank, as a member institution, is required to own a stock investment in the Federal Home Loan Bank of Atlanta (“FHLB”).

This stock is generally pledged against any borrowings from the FHLB and cash dividends on our FHLB stock are recorded in investment income.

Other investments include stock acquired for membership and regulatory purposes, such as Federal Home Loan Bank of Atlanta (“FHLB”) stock, investments in unconsolidated subsidiaries and other nonmarketable securities.

FHLB stock is generally pledged against any borrowings from the FHLB and cash dividends on our FHLB stock are recorded in investment income.

Other nonmarketable securities consist of investments in funds related to the Small Business Investment Company (“SBIC”) and Rural Business Investment Company (“RBIC”) Programs.

No ready market exists for these stocks and they have no quoted market value.

However, redemption of this stock has historically been at par value.

Other investments also include a $ 403,000 investment in the Trusts.

As a result, these securities are carried at cost and are periodically evaluated for impairment.

Loans are stated at the principal balance outstanding.

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In accordance with the CARES Act, the Company implemented loan modification programs in response to the COVID-19 pandemic, and the Company elected the accounting policy in the CARES Act to not apply TDR accounting to loans modified for borrowers impacted by the COVID-19 pandemic.

In 2020, the Company granted short-term loan deferrals to six client relationships, with loans totaling $ 3.2 million at December 31, 2020, which were considered TDRs due to the client experiencing financial difficulty before the pandemic.

In 2020, the Company granted short-term loan deferrals to six client relationships which were considered TDRs due to the client experiencing financial difficulty before the pandemic.

Our policy with respect to accrual of interest on loans restructured in a TDR follows relevant supervisory guidance.

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No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use.

Operating Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”

which requires for all operating leases the recognition of a right-of-use (“ROU”) asset and a corresponding lease liability, in the balance sheet.

Upon adoption, the Company elected practical expedients including existing leases retaining their classification as operating leases and combining lease and non-lease components.

The Company also elected to not recognize right-of-use assets and lease liabilities arising from short-term leases.

Bank Owned Life Insurance Policies

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charged either on a periodic basis or based on activity.

Our accounting policies did not change materially since the principles of revenue recognition from Topic 606 are largely consistent with existing guidance and current practices applied by our business.

The following is a discussion of revenues within the scope of the guidance:

Service fees on deposit accounts - The Company earns fees from its deposit clients for various transaction-based, account maintenance, and overdraft or non-sufficient funds (“NSF”) services.

Transaction-based fees, which include services such as stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the client's request.

Account maintenance fees, which relate primarily to monthly maintenance and account management, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation.

Overdraft and NSF fees are recognized at the point in time that the overdraft occurs or the NSF item is presented.

Service charges on deposits are withdrawn from the client's account balance.  

ATM and debit card income - The Company earns interchange fees from debit cardholder transactions conducted through the payment networks.

Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.  

Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, the Company has made no significant judgments in applying the revenue guidance prescribed in Topic 606 that affect the determination of the amount and timing of revenue from contracts with customers.

The financial statements have been prepared on the accrual basis.

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Newly Issued, But Not yet Effective Accounting Standards

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments”

Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Financial institutions and other organizations will now use forward-looking information to form their credit loss estimates.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.

In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration.

ASU 2016-13 was originally effective for all annual and interim periods beginning after December 31, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018.

Adoption will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

The Company has established a team of individuals from credit, finance and risk management to evaluate the requirements of the new standard and the impact it will have on its processes.

In November 2019, the FASB issued guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, “Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments”

The amendments affect a variety of Topics in the Accounting Standards Codification.

For public business entities that meet the definition of a smaller reporting company, such as the Company, the amendments are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years.

Early adoption is permitted in any interim period as long as the Company has adopted to amendments in ASU 2016-13.

Currently, the Company does not expect to adopt the ASU before the effective period.

ASU 2016-13 –

Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The standard will replace the current incurred loss approach with an expected loss model, referred to as the current expected credit loss (“CECL”) model.

The new standard will apply to financial assets subject to credit losses and measured at amortized cost and certain off-balance-sheet credit exposures, which include, but are not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees.

ASU 2016-13 simplifies the accounting for purchased credit-impaired debt securities and loans and expands the disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for loan and lease losses.

In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination.

For public business entities that meet the definition of a smaller reporting company, such as the Company, the ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2022.

Early adoption is permitted in any interim period as long as the Company has adopted to the amendments in ASU 2016-13.

Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a cumulative effect adjustment to equity as of the beginning of the period in which the guidance is effective.

The Company is finalizing its evaluation of the adoption of this ASU and plans to early adopt as of January 1, 2022.

The Company to date has selected the software vendor of choice for implementation, sourced and tested required data from the Company’s loan systems, tested data feeds to the model, contracted for and received results from independent third parties of model validation of the CECL model and process, determined appropriate segmentations of its portfolio, selected a preliminary forecast period for reasonable and supportable forecasts, and has performed parallel runs of the model.

The Company is currently finalizing its assessment of current and forecasted macroeconomic factors and assumptions and testing and finalization of internal controls.

The Company currently estimates the allowance for loan losses will increase by a range of $ 1 million and $ 3 million.

In addition, the Company expects to recognize a liability for unfunded commitments between $ 2.5 million and $ 4 million upon adoption.

The Company will finalize the adoption during the first quarter of 2022.

In October 2020, the FASB updated various Topics of the Accounting Standards Codification to align the guidance in various SEC sections of the Codification with the requirements of certain SEC final rules.

The amendments were effective upon issuance and did not have a material effect on the financial statements.

In August 2021, the FASB issued amendments to update SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No.

33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No.

33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.

The amendments are effective upon issuance.

The Company does not expect these amendments to have a material effect on its financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

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Available for sale

Corporate bonds

US treasuries

US government agencies

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Total mortgage-backed securities

During 2020, approximately $ 2.0 million of investment securities were either sold or called, subsequently resulting in a gain on sale of investment securities of $ 3,000 .

During 2021, approximately $ 770,000 of investment securities were either sold or called, subsequently resulting in a loss on sale of investment securities of $ 3,000 .

During 2020, approximately $ 2.0 million of investment securities were either sold or called, resulting in a gain on sale of investment securities of $ 3,000 .

The amortized costs and fair values of investment securities available for sale at December 31, 2021 and 2020, by contractual maturity, are shown below.

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Available for sale

Corporate bonds

US treasuries

US government agencies

SBA securities

State and political subdivisions

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Federal Home Loan Bank stock

Other investments

Other nonmarketable investments

Investment in Trust Preferred subsidiaries

The Company has evaluated the FHLB stock for impairment and determined that the investment in FHLB stock is not other than temporarily impaired as of December 31, 2020 and ultimate recoverability of the par value of this investment is probable.

Total other investments

The Company has evaluated other investments for impairment and determined that the other investments are not other than temporarily impaired as of December 31, 2021 and ultimate recoverability of the par value of this investment is probable.

All of the FHLB stock is used to collateralize advances with the FHLB.

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On June 26, 2020, we completed the sale of our PPP loan portfolio to The Loan Source Inc., together with its servicing partner, ACAP SME LLC, and immediately recognized SBA lender fee income of $ 2.2 million, net of sale and processing costs, which is included in other noninterest income in the consolidated financial statements.

The SBA offered a second round of PPP loans through May 31, 2021;

however, we did not originate any new PPP loans.

We did, however, receive referral fees of approximately $ 268,000 during the three months ended June 30, 2021 from The Loan Source Inc.

for PPP loans they originated to our clients.

Portfolio Segment Methodology

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Greater than 90 days

Consumer loans 30 days or more past due were 0.09 % and 0.13 % as of December 31, 2020 and 2019, respectively.

Consumer loans 30 days or more past due were 0.09 % as of December 31, 2021 and 2020, respectively.

The tables below provide a breakdown of outstanding consumer loans by risk category.

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Recorded investment in loans

(dollars in thousands)

Individually evaluated

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Under the CARES Act, the Company granted short-term loan deferrals to 864 loan clients, of which two clients remain under deferral as of December 31, 2020.

Under the CARES Act, the Company granted short-term loan deferrals to 864 loan clients, of which all had returned to normal payments as of December 31, 2021.

In addition, short-term loan deferrals were granted to six clients with loans totaling $ 3.2 million at December 31, 2020, which were considered TDRs due to the client experiencing financial difficulty before the pandemic.

Three loans totaling $443,000 were renewed during 2021 and considered TDRs at the time of renewal.

The following table summarizes the concession at the time of modification and the recorded investment in our TDRs before and after their modification.

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On October 9, 2020 we sold two of our office locations in Columbia, South Carolina and recognized a gain of $ 180,000 in the transaction.

Construction in process at December 31, 2020 and 2019 primarily included costs associated with the new bank headquarters building.

Construction in process at December 31, 2021 and 2020 primarily included costs associated with the new bank headquarters building located in Greenville, South Carolina.

Depreciation and amortization expense for the years ended December 31, 2021 and 2020 was $ 2.2 million and $ 2.1 million, respectively.

6 unchanged sentences

NOTE 7 –

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”.

Upon adoption, the Company elected practical expedients including existing leases retaining their classification as operating leases and combining lease and non-lease components.

The Company also elected to not recognize right-of-use assets and lease liabilities arising from short-term leases.

As of December 31, 2020, the Company leased six of our offices under various operating lease agreements.

The lease agreements have maturity dates ranging from February 2022 to October 2029, some of which include options for multiple five-year extensions.

As of December 31, 2021, the Company leased seven of our offices under various operating lease agreements.

The lease agreements have maturity dates ranging from February 2022 to February 2032, some of which include options for multiple five-year extensions.

The weighted average remaining life of the lease term for these leases was 7.92 years and 7.30 years as of December 31, 2021 and 2020, respectively.

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Other real estate owned is comprised of real estate acquired in settlement of loans and is included in other assets on the balance sheet.

At December 31, 2020 there was one commercial property owned totaling $ 1.2 million compared to no other real estate owned at December 31, 2019.

At December 31, 2021 there was no commercial property owned compared to one commercial property owned totaling $ 1.2 million at December 31, 2020.

The following summarizes the activity in the real estate acquired in settlement of loans portion of other real estate owned:

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Money market accounts

Time, less than $100,000

Time, $100,000 and over

Time deposits

Total deposits

At December 31, 2021 and 2020, time deposits greater than $250,000 were $ 84.4 million and $ 130.9 million, respectively.

Also, at December 31, 2020 and 2019, the Company had approximately $ 22.0 million and $ 67.4 million, respectively, of time deposits that were obtained outside of the Company’s primary market.

Also, at December 31, 2021, the Company had no deposits that were obtained outside of the Company’s primary market, while at December 31, 2020 these balances were $ 22.0 million.

Interest expense on time deposits greater than $100,000 was $ 1.1 million for the year ended December 31, 2021, $ 4.6 million for the year ended December 31, 2020, and $ 6.9 million for the year ended December 31, 2019.

At December 31, 2020 the scheduled maturities of certificates of deposit are as follows:

At December 31, 2021 the scheduled maturities of time deposits are as follows:

(dollars in thousands)

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Federal Home Loan Bank Advances and Other Borrowings

At December 31, 2020 and 2019, the Company had $25.0 million and $110.0 million in FHLB Advances, respectively.

The FHLB advances are secured with approximately $ 868.5 million of mortgage loans and $ 3.1 million of stock in the FHLB.

At December 31, 2021, the Company had no FHLB Advances, while at December 31, 2020 there were $25.0 million in FHLB Advances.

Listed below is a summary of the terms and maturities of the advances outstanding at December 31, 2021 and 2020.

2 unchanged sentences

December 31, 2021

The Company also has an unsecured, interest only line of credit for $ 15 million with another financial institution which was unused at December 31, 2021.

The line of credit bears interest at LIBOR plus 3.50 % and matures on December 31, 2021 .

The line was renewed on December 21, 2021, bearing interest at One Month CME Term SOFR plus 3.50 % and maturing on December 20, 2023 .

The loan agreement contains various financial covenants related to capital, earnings and asset quality.

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The Notes were offered and sold by the Company to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and the provisions of Regulation D promulgated thereunder (the “Private Placement”).

The Company intends to use the proceeds from the offering, which were approximately $ 22.5 million, for general corporate purposes, including providing capital to the Bank and supporting organic growth.

The Notes have a ten -year term and, from and including the date of issuance to but excluding September 30, 2024, will bear interest at a fixed annual rate of 4.75%, payable semi-annually in arrears, for the first five years of the term.

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Gains or losses on sale and generally any subsequent adjustments to the value are recorded as a component of real estate owned activity.

When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company considers the OREO as nonrecurring Level 3.

Derivative Financial Instruments

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Securities available for sale:

Corporate bonds

US treasuries

US government agencies

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Impaired loans

Other real estate owned

Total assets measured at fair value on a nonrecurring basis

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Impaired loans

Other real estate owned

Total assets measured at fair value on a nonrecurring basis

The Company had no liabilities carried at fair value or measured at fair value on a nonrecurring basis.

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of December 31, 2020, the significant unobservable inputs used in the fair value measurements were as follows:

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of December 31, 2021 and 2020, the significant unobservable inputs used in the fair value measurements were as follows:

Valuation Technique

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Financial Liabilities:

FHLB and other borrowings

Subordinated debentures

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Components of this contract vary based on transaction and account volume, monthly charges and certain termination fees.

At December 31, 2020, the Company has a contract with a construction company for $ 28.2 million to construct a new bank headquarters in Greenville, South Carolina.

At December 31, 2021, the Company has a contract with a construction company for $ 30.3 million to construct a new bank headquarters in Greenville, South Carolina of which $ 21.8 million had been paid.

The Company has commitments with various investment partners under the Small Business Investment Company (“SBIC”) and the Rural Business Investment Company (“RBIC”) Programs for which we have committed to make capital contributions from time to time.

These commitments totaled $ 2.25 million at December 31, 2021.

The Company may be subject to litigation and claims in the normal course of business.

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In addition, the Company periodically enters into various consulting agreements with the director for development, administration and advisory services related to the purchase of property and construction of current and future branch office sites, including the development of the new bank headquarters in Greenville, South Carolina.

Payments totaling $ 600,000 were made to the director for these services during the years ended December 31, 2019 and 2020.

Payments totaling $ 300,000 and $ 600,000 were made to the director for these services during the years ended December 31, 2021 and 2020, respectively.

The Company is of the opinion that the lease payments and consulting fees represent market costs that could have been obtained in similar “arms length”

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As of December 31, 2021 and 2020, the Company had an accrued benefit obligation of $ 9.2 million and $ 8.2 million, respectively.

The Company incurred expenses related to this plan of $ 1.6 million, $ 657,000 , and $ 940,000 in 2020, 2019, and 2018, respectively.

The Company incurred expenses related to this plan of $ 1.0 million, $ 1.6 million, and $ 657,000 in 2021, 2020, and 2019, respectively.

NOTE 21 –

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On March 15, 2016, the Company adopted the 2016 Equity Incentive Plan, making available for issuance 400,000 stock options.

The options may be exercised at an exercise price per share based on the fair market value and determined on the date of grant and expire 10 years from the grant date.

As of December 31, 2020, there were 123,827 options available for grant under the 2016 Equity Incentive Plan.

The Plan expired on March 15, 2021 and no further shares may be issued from the plan.

On March 17, 2020, the Company adopted the 2020 Equity Incentive Plan, making available for issuance up to 450,000 stock options.

The options may be exercised at an exercise price per share based on the fair market value and determined on the date of grant and expire 10 years from the grant date.

As of December 31, 2020, there were no shares issued under this plan.

As of December 31, 2021, there were 422,550 shares available for grant under the 2020 Equity Incentive Plan.

A summary of the status of the stock option plan and changes for the period is presented below:

For the years ended December 31,

Outstanding at beginning of year

Forfeited or expired

Outstanding at end of year

Options exercisable at year-end

Weighted average fair value of options granted during the year

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The cost is expected to be recognized over a weighted-average period of 2.7 years.

The fair value of stock option grants that vested during 2020, 2019, and 2018 was $ 1.2 million, $ 1.2 million and $ 973,000 , respectively.

The fair value of stock option grants that vested during 2021, 2020, and 2019 was $ 1.1 million, $ 1.2 million and $ 1.2 million, respectively.

Restricted Stock Grants

On May 17, 2016, the Company adopted the 2016 Equity Incentive Plan which included a provision for the issuance of 50,000 shares of common stock to be issuable as restricted stock grants.

As of December 31, 2020, 25,524 shares of restricted stock were available for grant.

The Plan expired on March 17, 2021 and no further shares may be issued from the plan.

On May 12, 2020, the Company adopted the 2020 Equity Incentive Plan which included a provision for the issuance of 450,000 shares of common stock to be issuable as either stock options or restricted stock grants.

As of December 31, 2020, there were no issuances of stock options or restricted stock under this plan.

As of December 31, 2021, there were 422,550 shares available for grant under the 2020 Equity Incentive Plan.

Shares of restricted stock granted to employees under the stock plans are subject to restrictions as to continuous employment for a specified time period following the date of grant.

3 unchanged sentences

Nonvested at end of year

At December 31, 2020, there was $ 700,000 of total unrecognized compensation cost related to nonvested restricted stock grants.

At December 31, 2021, there was $ 1.4 million of total unrecognized compensation cost related to nonvested restricted stock grants.

The cost is expected to be recognized over a weighted-average period of 3.0 years.

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(dollars in thousands)

Commercial and Retail Banking

Mortgage Banking

Corporate Operations

Interest income

8 unchanged sentences

Year ended December 31, 2020

Commercial and Retail Banking

Mortgage Banking

Corporate Operations

Interest income

86 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data